New Zealand electronic card spending continues to climb in November

Household spending remains firm. Overall retail spending was up 0.3% over November, while core spending (which excludes the volatile motor vehicle and fuel categories) was up 0.4%. November's increase come on top of solid gains earlier in 2015, and leaves the level of spending up a 4.5% over the past year. While that rate of growth is down a bit from earlier in 2015, it's still a very healthy rate of spending growth, especially in light of the softness in prices. 

Over November we saw continued gains in spending on consumables. There were also solid gains in spending on hospitality and apparel. There was some pull back in spending on durables and, in light of signs that the housing market is losing some momentum, it will be worth watching to see if this continues over the coming months. High levels of migration and strong tourist demand continue to provide support spending. Households will also be benefitting from continued price discounting in the run up to Christmas. 

"While spending is looking firm right now, as we look to 2016 we do expect to see some softening in spending growth", says Westpac Research.

Employment growth has already slowed. In addition, the economy will face significant headwinds over the coming year from softness in global trade, drought, and the levelling off of the Canterbury rebuild.